Eighth Circuit Reinstates ERISA Case Against Wal-Mart Involving Iqbal Plausibility Standard

401K_2 A number of my ERISA friends have sent me the case of Braden v. Wal-Mart Stores, No. 08-3798 (8th Cir. Nov. 25, 2009).  The case involves a class action dispute, alleging breach of fiduciary issues in the way that Wal-Mart managed its profit sharing and 401(k) retirement plans:

The gravamen of the complaint is that appellees failed adequately to evaluate the investment options included in the Plan. It alleges that the process by which the mutual funds were selected was tainted by appellees’ failure to consider trustee Merrill Lynch’s interest in including funds that shared their fees with the trustee. The result of these failures, according to Braden, is that some or all of the investment options included in the Plan charge excessive fees. He estimates that these fees have unnecessarily cost the Plan some $60 million over the past six years and will continue to waste approximately $20 million per year . . . .

Braden alleges extensive facts in support of these claims. He claims that Wal-
Mart’s retirement plan is relatively large and that plans of such size have substantial bargaining power in the highly competitive 401(k) marketplace. As a result, plans such as Wal-Mart’s can obtain institutional shares of mutual funds, which, Braden claims, are significantly cheaper than the retail shares generally offered to individual investors. Nonetheless, he alleges that the Plan only offers retail class shares to participants. Braden also avers that seven of the ten funds charge 12b-1 fees, which he alleges are used to benefit the fund companies but not Plan participants.

The case is significant because the Plan has over one million participants and nearly $10 billion in assets.

Continue ReadingEighth Circuit Reinstates ERISA Case Against Wal-Mart Involving Iqbal Plausibility Standard

Copenhagen Conundrum

We are only a week away from the beginning of the highly anticipated global climate summit in Copenhagen.  I recently took part in a mock negotiation session (I represented Mexico), and I can attest to just how difficult it will be to reach any agreement at the summit – even, as has been suggested lately, an agreement in principle without a formally binding treaty.  World leaders recognized as much at the recent Asia Pacific Economic Cooperation (APEC) meeting, and admitted that it was unrealistic to expect that a legally binding international treaty could be negotiated at Copenhagen.  From the basics of climate science to poverty abatement, the issues that divide the parties are vast.  Those issues have been discussed extensively, so I will instead point out three recent events that may affect the likelihood of a deal:

November 20, 2009: An electronic break-in at the University of East Anglia reveals documents and e-mails that appear to show intent to withhold or manipulate certain data; quickly dubbed “Climategate” by climate skeptics, the leaks are at best embarrassing for prominent climate scientists.

November 25, 2009: President Obama announces that the United States will commit to emissions cuts of 17 percent by 2020 and about 83 percent by 2050; Obama also announced that he will personally attend part of the summit.  The pledges are expected to break a logjam of countries that had been waiting for a United States commitment. 

November 29, 2009: India and China indicate that they may walk out of the negotiations if the developed countries do not agree to the sharing of “green” technology and massive economic transfers for a variety of climate change mitigation and abatement purposes, such as stopping deforestation and forest degradation.

No matter what your position is, the challenges are daunting and the stakes are high.  Whatever happens, the Copenhagen summit will be a fascinating opportunity to observe international diplomacy in the environmental context.

Continue ReadingCopenhagen Conundrum

Musings on Torture and the Saving of Lives

1465e9731e43ae5aI was interested in Lisa LaPlante’s post on torture. It came hard upon my attendance at a conference on Christian Realism in which the matter of hard choices got quite the attention. My comment got so long that I’ve decided to make it a post. I offer it here in the interest of stirring up some controversy to wake us from the haze of our tryptophan coma.

Lisa, commenting on the recent film Men Who Stare At Goats, asks if we are Cassidy or Hooper? I haven’t seen the movie, but the question strikes me as too simple. We are  both and perhaps we should be.

Continue ReadingMusings on Torture and the Saving of Lives